The major hypotheses to be investigated are that Medicaid reimbursement for nursing home services and the mechanism whereby that reimbursement is determined have a predictable impact on the scope of services provided to residents within nursing care facilities. Furthermore, by altering the extent, and variety of these services, changes in the reimbursement system cause changes in the composition of patients by funding source within the long-term care facility. The magnitude of these effects are determined by the use of the 1973-74 National Nursing Home Survey in conjunction with secondary data on the Medicaid reimbursement policies in effect in the various states.